Deck 4: Process Costing

Question 1

One work in process account is used in a process cost system.

Answer 1

False

Question 2

There are no units in process at the beginning of the period, 500 units in process at the end of the period that are 30% complete, and 3,000 units transferred out during the period.Based on this information, there were 3,500 units started during the period under the weighted-average method.

Answer 2

True

Question 3

Under the weighted-average method, unit material cost is calculated by taking total beginning material costs plus the material costs added during the period, then dividing by the equivalent units in the process during the period.

Answer 3

True

Question 4

The equivalent units of production of ten units that are 20% complete is 2 full units.

Question 5

In a process cost system under the weighted-average method, labour costs are added to work in process in each producing department as incurred.

Question 6

In a process cost system, total costs are determinable at any point in time by examining the account balances.

Question 7

Process cost systems are used to apply costs to merchandise inventory.

Question 8

Under the weighted-average method, the physical units in a department are the actual units in a department regardless of the degree of any work performed.

Question 9

Equivalent units of production are used to determine the cost per unit of all products, whether completed or not.

Question 10

In a process cost system, costs are tracked through individual jobs.

Question 11

The weighted-average method of computing equivalent units assumes that products are at the same point of completion for both materials and conversion costs.

Question 12

Unit production costs must be calculated before the equivalent units of production can be calculated.

Question 13

The accumulation of the three manufacturing cost elements to Work in Process in a process cost system differs significantly from how they are assigned in a job order cost system.

Question 14

Production of Mountain Dew would likely be done using a process cost system.

Question 15

Process cost accounting focuses on the process involved in manufacturing products that are very unique in nature.

Question 16

A primary driver of overhead costs in continuous manufacturing operations is direct labour hours.

Question 17

Equivalent units of production is an expression of the number of units that would have been started and finished if all of the effort were directed at that purpose.

Question 18

The first step performed in preparing a production cost report is computing the physical unit flow.

Question 19

In a process cost system, labour and overhead can be added in any production department; however, materials are only added in the first department.

Question 20

More frequent materials requisitions are generally required in a process cost system than in a job order cost system.

Question 21

In the Carter Company, there are 15,000 units in beginning work in process, 30,000 units started into production, and 7,000 units in ending work in process 60% completed.How many physical units are to be accounted for?

A)45,000
B)38,000
C)52,000
D)27,000

Question 22

In process manufacturing, units are mass produced in a continuous fashion.

Question 23

The cost reconciliation schedule shows that total costs accounted for equal the total costs to be accounted for.

Question 24

Which of the following statements is true?

A)Both job order cost and process cost systems track direct materials and direct labour, but only job order cost systems track manufacturing overhead.
B)Both job order cost and process cost systems track direct materials and direct labour, but only process cost systems track manufacturing overhead.
C)Both job order cost and process cost systems track direct materials, direct labour and manufacturing overhead.
D)Only manufacturing overhead costs are tracked in both job order cost and process cost systems.

Question 25

A production cost report is an internal document for management that shows production quantity and cost data for a particular production department.

Question 26

Hace, Inc.began March with 650 units in beginning work in process, 11,400 units started into production, and 500 units in ending work in process that are 30% completed.How many physical units are to be accounted for?

A)11,550
B)12,050
C)11,900
D)11,250

Question 27

When goods are completed, the entry to record the transfer of the goods out of the last department includes a debit to Cost of Goods Sold.

Question 28

When is a process cost accounting system most appropriate?

A)When mass produced products are manufactured that are very similar in nature
B)When a company produces multiple jobs within the same accounting period
C)When companies produce uniquely different products
D)When a variety of different products are produced, each one requiring different types of material, labour, and overhead

Question 29

Operations costing involves a combination of a process cost and a job order cost system.

Question 30

The flow of costs in a process costing system requires that materials, labour, and overhead be added in equal amounts in each process or department involved to complete the product.

Question 31

When material costs and conversion costs do not occur in the same process at the same time, the weighted average method cannot be used effectively.

Question 32

One similarity of process cost accounting with job order cost accounting is that both determine manufacturing costs.

Question 33

Which of the following items is not a characteristic of a process cost system?

A)Once production begins, it continues until the finished product emerges.
B)The products produced are heterogeneous in nature.
C)The focus is on continually producing similar products.
D)When the finished product emerges, all units have exactly the same amount of materials, labour, and overhead.

Question 34

Companies often use a combination of a process cost and a job order cost system, called job process costing.

Question 35

Which of the following statements about the work in process account is true?

A)Both job order cost and process cost systems use only one work in process account.
B)Both job order cost and process cost systems use several work in process accounts.
C)Job order cost systems use several work in process accounts, but process cost systems use only one.
D)Job order cost systems use only one work in process account, but process cost systems use several.

Question 36

Conversion cost is another name for manufacturing overhead.

Question 37

Zargus Company began the month of June with 1,650 units in beginning work in process, 11,400 units started into production, and 500 units in ending work in process that are 30% completed.How many units were transferred out during June?

A)12,550
B)12,050
C)11,550
D)11,250

Question 38

Beginning work in process is added to units completed and transferred out to determine equivalent units of production under the weighted-average method.

Question 39

In order to calculate the physical unit flow, a company must first calculate the equivalent units of production.

Question 40

Which of the following is a characteristic of products that are mass-produced in a continuous fashion?

A)They are grouped in batches.
B)They are produced all in one process.
C)Each batch of costs is accumulated in a separate cost of goods sold account.
D)The products are identical or very similar in nature.

Question 41

A product requires processing in two departments, Department 22 and then Department 23, before it is completed.What happens to costs transferred out of Department 22?

A)They are debited to Finished Goods Inventory.
B)They are transferred to Cost of Goods Sold.
C)They are debited to Work in Process-Department 23.
D)They are credited to Manufacturing Overhead.

Question 42

For which one of the following would a process cost system most likely be used?

A)Custom furniture
B)Potato chips
C)Motion pictures
D)Cruise ships

Question 43

What are physical units?

A)The actual units to be accounted for during a period.
B)The pro-rata portion of units completed during the period.
C)Units in process at the end of the period.
D)The total units completed and transferred out during the period.

Question 44

Which of the following is true of a process cost system?

A)There is a separate Work in Process account for each process.
B)A subsidiary ledger tracks the costs of each job.
C)There is a separate Work in Process account for each product.
D)Materials are added at the beginning process, and conversion costs are added at the end.

Question 45

Wind Mill Company had the following department data: Work in process, physical units, August 1 72,000
Completed and transferred out physical units 106,000
Work in process, physical units, August 31 74,000
Materials are added at the beginning of the process.What is the total number of equivalent units for materials in August if the weighted average method is used?

A)104,000
B)108,000
C)180,000
D)252,000

Question 46

Why are materials requisition forms used less frequently in process costing?

A)Materials are rarely used in production.
B)Requisitions are for larger quantities so fewer orders are needed.
C)Materials are only added at the beginning of production.
D)There are no materials inventories because process costing uses a just in time system.

Question 47

Which group of the following manufacturing cost elements occurs in a process cost system?

A)Direct labour and conversion costs
B)Direct labour and direct material
C)Manufacturing overhead and conversion costs
D)Direct materials, direct labour, and manufacturing overhead

Question 48

A process with no beginning work in process, completed and transferred out 12,000 units during a period and had 1,000 units in the ending work in process that were 30% complete.Materials are added at the beginning of the process and conversion costs are added equally throughout the process.How much is the equivalent units of production for the period for conversion costs if the weighted average method is used?

A)13,000 equivalent units
B)11,000 equivalent units
C)12,000 equivalent units
D)12,300 equivalent units

Question 49

Use the following information for questions
A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process.For the month of January, there were no units in the beginning work in process inventory; 10,000 units were started into production in January; and there were 4,000 units that were 60% complete in the ending work in process inventory at the end of January.The weighted average method is used.
What were the equivalent units of production for materials for the month of January?

A)8,400 equivalent units
B)14,000 equivalent units
C)10,000 equivalent units
D)4,000 equivalent units

Question 50

Which one of the following will appear as a credit in the Work in Process account of a first department in a two stage production process?

A)Materials used
B)Overhead applied
C)Cost of goods sold
D)Cost of products transferred into the second department

Question 51

Which one of the following is a true statement about process cost systems?

A)In process cost systems, costs are accumulated and assigned.
B)A process cost system has one work in process account for each job.
C)In process cost systems, costs are summarized by batch.
D)Unit costs are ignored in process cost systems because they are identical.

Question 52

What document is used to summarize costs in process cost accounting?

A)Job order cost sheet
B)Process order cost sheet
C)Production cost report
D)Manufacturing cost sheet

Question 53

Use the following information for questions
A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process.For the month of January, there were no units in the beginning work in process inventory; 10,000 units were started into production in January; and there were 4,000 units that were 60% complete in the ending work in process inventory at the end of January.The weighted average method is used.
What were the equivalent units of production for conversion costs for the month of January?

A)8,400 equivalent units
B)14,000 equivalent units
C)10,000 equivalent units
D)12,400 equivalent units

Question 54

Which one of the following is used most frequently to allocate overhead costs in continuous manufacturing operations?

A)Direct labour dollars
B)Direct labour hours
C)Machine hours
D)Machine maintenance dollars

Question 55

Which statement is true concerning process cost systems?

A)Each work in process account represents the cost of a different product.
B)The cost of each unit of product is determined after each unit is produced.
C)Product costs are determined when the products are sold.
D)Product costs are summarized on production cost reports.

Question 56

Which one of the following is a difference between a job order cost and a process cost system?

A)The manufacturing cost elements are different.
B)Costs are totalled at different points in the manufacturing process.
C)The costs flow through the accounts differently.
D)Three primary costs make up the costs of products in a job order system, while only two costs are used in process costing.

Question 57

Swick Industries uses a process cost system.The company assigned manufacturing overhead costs to production.What transaction was recognized?

A)Finished Goods Inventory account was increased.
B)Cost of Goods Sold was increased.
C)A Manufacturing Overhead account was reduced.
D)The Work in Process account was reduced.

Question 58

Special J Company had the following department information about physical units and percentage of completion: Materials are added at the beginning of the production process.Conversion costs are added equally throughout production.What is the total number of equivalent units during May for conversion costs if the weighted average method is used?

A)52,400
B)32,000
C)23,360
D)31,760

Question 59

Which of the following is correct concerning the number of work in process accounts used by job order and process cost systems?

A)Job Order = several; Process Cost = one
B)Job Order = one control account for each job; Process Cost = one for each process
C)Job Order = one control account; Process Cost = one for each process
D)Job Order = none; Process Cost = several

Question 60

Cyrprano Company had the following department data: Materials are added at the beginning of the process.Conversion costs are added evenly throughout the process.The incomplete units are 40% completed as to conversion costs.What is the total number of equivalent units for materials during the period if the weighted average method is used?

A)25,000
B)15,000
C)22,000
D)23,000

Question 61

Use the following information to answer questions
In the month of March, a department had 8,000 units in beginning work in process that were 75% complete.During March, 30,000 units were transferred into production from another department.At the end of March there were 2,000 units in ending work in process that were 75% complete.Materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process.The weighted average method is used.
How much are equivalent units of production for materials for March?

A)42,000 equivalent units
B)28,500 equivalent units
C)37,500 equivalent units
D)38,000 equivalent units

Question 62

Use the following information to answer questions
In the month of March, a department had 8,000 units in beginning work in process that were 75% complete.During March, 30,000 units were transferred into production from another department.At the end of March there were 2,000 units in ending work in process that were 75% complete.Materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process.The weighted average method is used.
How much is the equivalent units of production for conversion costs for March?

A)38,000 equivalent units
B)28,500 equivalent units
C)37,500 equivalent units
D)30,000 equivalent units

Question 63

How are equivalent units calculated?

A)Multiplying the percentage of work done by the physical units
B)Dividing physical units by the percentage of work done
C)Multiplying the percentage of work done by the equivalent units of output
D)Dividing equivalent units by the percentage of work done

Question 64

Why is it necessary to calculate equivalent units of production in a department?

A)A physical count of units is impossible.
B)A company may transfer numerous batches out during the year.
C)The physical units in the department are always 100% complete.
D)Some units worked on in the department are not fully complete.

Question 65

Use the following information to answer questions
In the month of March, a department had 8,000 units in beginning work in process that were 75% complete.During March, 30,000 units were transferred into production from another department.At the end of March there were 2,000 units in ending work in process that were 75% complete.Materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process.The weighted average method is used.
How many units were transferred out of the process in March?

A)36,000 units
B)32,000 units
C)21,000 units
D)30,000 units